Nama, the toxic loans agency, has extended its first-ever funding to the country's developers as they struggle to finish projects around the country.
The agency declined to name the developers who received the capital or the amounts they received. "NAMA has provided small amounts of urgently needed working capital to support a number of projects to date,'' said a statement from the agency. A number of developers are now expected to seek permission from NAMA to roll over huge debts in the next few weeks. NAMA said yesterday it would decide on these when staff review the business plans of the developers.
It is likely that major developers will now be forced to sell unprofitable or underperforming assets, following a review of their business plans. While NAMA is anxious to avoid a fire-sale of development land, trophy assets which are in the red are under scrutiny.
Some of the top 10 developers have had business plans sent back because they are not judged to be realistic enough. However a number of plans are still outstanding. They disclose huge indebtedness and extensive breaches of loan covenants.
Asked on which criteria the working capital is being made available, a Nama spokesman said: "Funds required to complete projects will only be provided if, in Nama's view, the projects make sense and this assessment will be carried out as part of the review of each borrower's business plan."
The leading developers have all hired advisers to complete their business plans. The plans must outline the company structure and any parts that are registered in the Isle of Man.
NAMA also has the power to consult the Revenue Commissioners when seeking information on developers, but the Government recently told the EU Commission that it doesn't intend to use these powers.